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ISPs accuse BT of jeopardising high-speed broadband scheme

David Ludlow
6 Apr 2011
ISPs accuse BT of jeopardising high-speed broadband scheme
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Says the company's prices are simply too high

Government plans to boost UK broadband speeds seemed to be on the up, with George Osbourne recently setting aside £50m for rural expansion.

However, in the wake of that, several ISPs have written to Ed Vaizey, the communications minister, complaining that BT's high prices are jeopardising the entire scheme. Considering the entire scheme will cost around £830m, it's a fairly serious accusation.

The heart of the argument put forwards in a letter written by five ISPs, including Virgin Media and TalkTalk, was that BT was charging too much for access to its physical infrastructure, including ducts and poles.

Vaizey was asked to intervene on behalf of the ISPs and ensure that costs to infrastructure were fair and to ensure that the continuation of the Broadband Delivery UK (BDUK) project could continue.

"We are unanimous in the belief that the BDUK competitive procurement process will lack a credible alternative to BT, should BT fail to make substantial revisions to… pricing," read the letter. "Without this, we believe that the BDUK process risks a lack of vigorous competition and as a result, will fail to deliver the investment, quality, speed of rollout, innovation and value for money, that industry is capable of delivering and that taxpayers deserve,"

The letter asserts that BT's stated prices are much higher than cost price and that it would actually be cheaper to replicate all of the existing infrastructure, starting afresh.

BT has hit back at these claims, stating that its duct access costs are competitive and "compare well with European averages". It also said that plans for pole access had been held up due to others delaying BT's own trials. Once trials had started, BT claims it can get a better handle on pricing.

Unsurprisingly, BT's rivals haven't responded well to this latest claim. Virgin Media has even gone so far as to tell Computer Weekly that, " "It is particularly revealing that BT has taken the unusual step of charging anything at all during the trial process, let alone prices that are considerably above that required to ensure investment and competition, which is necessary to meet the ambitions of getting next-generation connectivity to those living outside our towns and cities."

While Vaizey has no direct powers to enforce BT to charge lower prices for access to its infrastructure, the matter can be passed on to the telecoms regulator, Ofcom. This organisation has the power to investigate the charges and lower them as it sees fit.

Super-fast broadband in the UK isn't all done for, though, particularly if you live in the South West of the UK. Cornwall has got its first taste of super-fast broadband thanks to a new BT network, partially funded by a European grant.

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